Hard times in the pipeline for natural gas hub Novy Urengoy
The city that was built near the Soviet Union's biggest gas field celebrates its 50-years-anniversary on the backdrop of international sanctions and depleted reserves. The Power of Siberia 2 is unlikely to give salvage.
There have been celebrations for weeks in Novy Urengoy. Representatives of local, regional and federal authorities alike have come to the far northern Yamal-Nenets region to mark the city's 50-years-anniversary.
So have also high-ranking representatives of the Russian natural gas industry.
Novy Urengoy was established in 1975 only few years after the discovery of the Urengoy gas field. Thousands of people moved north to join the development of the field that originally held more than 10 trillion cubic metres of natural gas.
On the middle of the Nenets tundra appeared a city that ultimately housed more than 100,000 people.
Urengoy was the Soviet Union's biggest gas discovery. In the subsequent years, pipeline connections were built to both domestic and international markets. For more than two decades, households in Slovakia and Hungary, and several more countries, heated their houses with gas from Urengoy.
Among the main export pipelines was the so-called Brotherhood Pipeline that went through Ukraine and to Hungary and Slovakia.
"Novy Urengoy is the heart of our gas industry," Deputy Prime Minister Aleksandr Novak said when he visited the city in early September.
But the natural gas hub is no longer what it used to be.
Reserves at the Urengoy field is quickly depleting, and there is reportedly less than 10 percent of the resources left.
Russia's war of aggression in Ukraine and the international sanctions also have major consequences for the industry.
The 'Brotherhood Pipeline' no longer brings gas to Europe. Operations at the 4,500 km long pipeline that runs through Sudzha in the Kursk region came to a halt in the end of 2024.
Only few months later, Russian troops used the abandoned pipeline as part of an attack on Ukrainian forces in Sudzha. Reportedly, up to 100 Russians crawled nearly 16 km in the pipeline for two days. A big number of them were killed.
The recent visit of Vladimir Putin to Beijing might have stirred optimism among some of the residents of Novy Urengoy.
The Russian ruler announced that projected Power of Siberia 2 will be built. On the dictator's plan is a pipeline that stretches all the way from the Yamal Peninsula to China. In the project, Novy Urengoy and its gas resources could get a key role.
According to developers, resources would also include the Tambey and Bovanenkovo fields in Yamal.
But the fate of the project is highly uncertain. According to many experts, there is no major interest in the project in Beijing.
While Putin is eager, even desperate, to sell natural gas to China and other Asian markets, the response from the east is unenthusiastic.
"To date, there have not been any authoritative statements from the Chinese government or Chinese media regarding what it calls the “Western natural gas pipeline,” experts Joseph Webster and Landon Derentz write in a piece for the Atlantic Council.
As soon as the prominent guests leave the anniversary parties in Novy Urengoy, the gas town will have to brace itself for hardship.
